Bank of N.Y. Profit Up 3%; PNC Profit Rises 30%

Reuters

Wednesday, 18 Apr 2007 | 10:20 AM ETReuters

SHARES

Bank of New York , which is buying Mellon Financial , said on Wednesday that first-quarter profit rose 3%, helped by higher fees from holding securities and processing trades for institutional investors.

Meanwhile, PNC Financial , a fast-growing northeast U.S. regional bank, said first-quarter profit rose 30%, helped by acquisitions and growth in every main business line.

PNC Earnings

PNC profits rose 30%, helped by fee-based businesses and the acquisition of Mercantile Bankshares. James E. Rohr, PNC Financial Services CEO, shares his outlook for the company with CNBC's Becky Quick.

Bank of New York's profit topped analyst forecasts, as securities servicing fees rose 19% while revenue rose 20% in asset and wealth management, the bank's other main business.

Net income increased to $434 million, or 57 cents a share, from $422 million, or 55 cents a share, a year earlier.

Bank of New York is reshaping itself by focusing on custody services for institutional clients and asset management.

In October, it swapped its 338-branch network for JPMorgan Chase's corporate trust business.

Two months later, it agreed to pay $16.5 billion for Mellon, creating Bank of New York Mellon Corp., a power in custody services and one of the biggest asset managers.

Thomas Renyi, Bank of New York's chief executive, said plans are on track for the merger, which is scheduled to close early this summer. Both companies have scheduled shareholder votes to approve the merger for May 24.

Among other custody banks, Mellon said quarterly profit rose 22%, while profit rose 15% at Northern Trust and 8% at State Street . All three released results on Tuesday.

Bank of New York's stock has risen 6% this year, compared with a 2% decline in the Philadelphia KBW Bank Index.

Bank of New York said fees from securities servicing increased to $990 million from $831 million a year earlier. Asset servicing revenue rose 17% to $393 million, while issuer services revenue, including corporate trust and depositary receipts, more than doubled to $319 million.

Fees from clearing services fell 19% to $278 million, which the bank attributed to a spinoff of some operations into a new company, BNY ConvergEx Group.

The bank changed from the prior quarter how it classified some sources of fee income.

PNC Financial

PNC said net income rose to $459 million, or $1.46 a share, from $354 million, or $1.19, a year earlier.

Excluding items, profit rose 22% to $434 million, or $1.38 a share, PNC said. Analysts on average forecast profit of $1.31 a share, according to Reuters Estimates.

The March 2 acquisition of Mercantile Bankshares for about $6 billion made PNC the 11th-largest U.S. bank by assets, and substantially expanded its presence in middle Atlantic states. Baltimore-based Mercantile ended last year with $17.7 billion of assets and about 240 banking offices.